Small Business Administration: Opportunities Exist to Improve	 
Oversight of Women's Business Centers and Coordination among	 
SBA's Business Assistance Programs (16-NOV-07, GAO-08-49).	 
                                                                 
The Women's Business Center (WBC) Program provides training and  
counseling services to women entrepreneurs, especially those who 
are socially and economically disadvantaged. In fiscal year 2007,
the Small Business Administration (SBA) funded awards to 99 WBCs.
However, Congress and WBCs expressed concerns about the uncertain
nature of the program's funding structure. Concerns have also	 
been raised about whether the WBC and two other SBA programs, the
Small Business Development Center (SBDC) and SCORE programs,	 
duplicate services. This report addresses (1) uncertainties	 
associated with the funding process for WBCs; (2) SBA's oversight
of the WBC program; and (3) actions that SBA and WBCs have taken 
to avoid duplication among the WBC, SBDC, and SCORE programs. GAO
reviewed policies, procedures, examinations, and studies related 
to the funding, oversight, and services of WBCs and interviewed  
SBA, WBC, SBDC, and SCORE officials.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-49						        
    ACCNO:   A78211						        
  TITLE:     Small Business Administration: Opportunities Exist to    
Improve Oversight of Women's Business Centers and Coordination	 
among SBA's Business Assistance Programs			 
     DATE:   11/16/2007 
  SUBJECT:   Federal funds					 
	     Funds management					 
	     Monitoring 					 
	     Performance measures				 
	     Policy evaluation					 
	     Program evaluation 				 
	     Program management 				 
	     Reporting requirements				 
	     Small business assistance				 
	     Women						 
	     Women-owned businesses				 
	     Legislation					 
	     Business planning					 
	     Government agency oversight			 
	     Policies and procedures				 
	     Program coordination				 
	     SBA Women's Business Center Program		 

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GAO-08-49

   

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Report to Congressional Requesters: 

United States Government Accountability Office: 

GAO: 

November 2007: 

Small Business Administration: 

Opportunities Exist to Improve Oversight of Women's Business Centers 
and Coordination among SBA's Business Assistance Programs: 

Women's Business Centers: 

GAO-08-49: 

GAO Highlights: 

Highlights of GAO-08-49, a report to congressional requesters. 

Why GAO Did This Study: 

The Womenï¿½s Business Center (WBC) Program provides training and 
counseling services to women entrepreneurs, especially those who are 
socially and economically disadvantaged. In fiscal year 2007, the Small 
Business Administration (SBA) funded awards to 99 WBCs. However, 
Congress and WBCs expressed concerns about the uncertain nature of the 
programï¿½s funding structure. Concerns have also been raised about 
whether the WBC and two other SBA programs, the Small Business 
Development Center (SBDC) and SCORE programs, duplicate services. This 
report addresses (1) uncertainties associated with the funding process 
for WBCs; (2) SBAï¿½s oversight of the WBC program; and (3) actions that 
SBA and WBCs have taken to avoid duplication among the WBC, SBDC, and 
SCORE programs. GAO reviewed policies, procedures, examinations, and 
studies related to the funding, oversight, and services of WBCs and 
interviewed SBA, WBC, SBDC, and SCORE officials. 

What GAO Found: 

Until 2007, SBA funded WBCs for up to 10 years, at which time it was 
expected that they would become self-sustaining. Specifically, since 
1997, SBA has made annual awards to WBCs for up to 5 years. Because of 
concerns that WBCs could not sustain operations without continued SBA 
funding, in 1999, Congress created a pilot program to extend funding an 
additional 5 years. Due to continued uncertainty about WBCsï¿½ ability to 
sustain operations without SBA funding, in May 2007, Congress passed 
legislation authorizing renewable 3-year awards to WBCs that 
ï¿½graduatedï¿½ from the program after 10 years and to current program 
participants. Like the current awards, the 3-year awards are 
competitive. SBA is revising its award process and plans to provide the 
3-year awards in fiscal year 2008 (see figure below). 

Though SBA has oversight procedures in place to monitor WBCsï¿½ 
performance and use of federal funds, GAO found indications that staff 
shortages from the agencyï¿½s downsizing and ineffective communication 
was hindering SBAï¿½s oversight efforts. SBA relies extensively on 
district office staff to oversee WBCs, but these staff members have 
other agency responsibilities and may not have the needed expertise to 
conduct some WBC oversight procedures. SBA provides annual training and 
has taken steps to adjust its oversight procedures to adapt to staffing 
changes, but concerns remain. Some WBCs also cited problems with 
communication, and one study reported that 54 percent of 52 WBCs 
responding to its survey said that SBA could improve its communication 
with the centers. Ineffective communication led to confusion among some 
WBCs about how to meet program requirements. 

Under the terms of the WBC award, SBA requires WBCs to coordinate with 
local SBDCs and SCORE chapters. However, GAO found that SBA provided 
limited guidance or information on successful coordination. Most of the 
WBCs that GAO spoke with explained that in some situations they 
referred clients to an SBDC or SCORE counselor, and some WBCs took 
steps to more actively coordinate with local SBDCs and SCORE chapters 
to avoid duplication and leverage resources. Still, some WBCs said that 
coordinating services was difficult, as the programs have similar 
performance measures and could end up competing for clients. Such 
concerns thwart coordination efforts and could increase the risk of 
duplication in some geographic areas. 

Figure: Women's Business Center Program Legislative Timeline: 

This figure is a women's business center legislative timeline between 
1988 and 2007. A few years are highlighted on the timeline: 

1998: The Women's Business Ownership Act of 1988 attended the Small 
Business Act to create the Women's Business Center (WBC) program with 
demonstration projects that would expire in 1991; 

1991: The Women's Business Development Act of 1991 made WBC's 3-year 
projects; 

1997: The Small Business Reauthorization Act of 1997 extended WBC 
projects to 5 years. 

1999: The Women's Business Centers Sustainability Act of 1999 created 5-
year sustainability pilot projects awarded to WBC's that had completed 
the first 5-year project; 

2007: The U.S. Troops Readiness, Veterans' Care, Katrina Recovery, and 
Iraq Accountability Appropriations Act amended the Small Business Act 
to repeal the sustainability pilot program and to permit WBC's to 
receive SBA funding on a continual basis. 

[See PDF for image] 

Source: GAO analysis of WBC program legislation. 

[End of figure] 

What GAO Recommends: 

To improve oversight of WBCs, GAO recommends that SBA reassess the 
responsibilities assigned to district office staff and develop a 
communication strategy. GAO also recommends that SBA provide guidance 
to facilitate coordination among its business assistance programs. SBA 
had no comments on a draft of this report. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.GAO-08-49]. For more information, contact 
William B. Shear at (202) 512-8678 or [email protected] 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Recent Legislation Addressed Concerns about the WBC Program's Funding: 

SBA Has Oversight Procedures in Place, but Imbalances in Its Staff 
Resources and Ineffective Communication with WBCs Have Hindered Their 
Effectiveness: 

WBCs Make Some Efforts to Coordinate with SBDCs and SCORE, but SBA 
Provides Limited Guidance to Support These Efforts: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments: 

Appendix I: Scope and Methodology: 

Appendix II: Studies Evaluating the Impact of WBCs: 

Appendix III:GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: WBC Program Legislative Changes by Center Status: 

Table 2: Examples of SBA's Fiscal Year 2007 Output and Outcome 
Performance Measures for WBCs: 

Table 3: Locations of Site Visits and Telephone Interviews with WBCs 
and SBDCs: 

Table 4: Assessment of Four Studies of WBCs: 

Figures: 

Figure 1: WBCs in SBA's Program in Fiscal Year 2007: 

Figure 2: WBC Program Legislative Timeline: 

Figure 3: WBC Coordination Efforts: 

Abbreviations: 

CPA: certified public accountant: 

DOTR: District Office Technical Representative: 

DPGM: Division of Procurement and Grants Management: 

EDMIS: Entrepreneurial Development Management Information System: 

OED: Office of Entrepreneurial Development: 

OIG: Office of Inspector General: 

OWBO: Office of Women's Business Ownership: 

PART: Program Assessment Rating Tool: 

SBA: Small Business Administration: 

SBDC: Small Business Development Center: 

SCORE: formerly Service Corps of Retired Executives: 

WBC: Women's Business Center: 

WBOR: Women's Business Ownership Representative: 

United States Government Accountability Office: 

Washington, DC 20548: 

November 16, 2007: 

The Honorable Steve Chabot: 
Ranking Member: 
Committee on Small Business: 
House of Representatives: 

The Honorable John F. Kerry: 
Chairman: 
Committee on Small Business and Entrepreneurship: 
United States Senate: 

The Honorable Olympia J. Snowe: 
Ranking Member: 
Committee on Small Business and Entrepreneurship: 
United States Senate: 

The Honorable Donald A. Manzullo: 
House of Representatives: 

The Women's Business Center (WBC) program, one of several business 
assistance programs offered by the Small Business Administration (SBA), 
provides long-term training, counseling, networking, and mentoring to 
women entrepreneurs, especially those who are socially and economically 
disadvantaged. In 1989 when the program began, SBA funded 13 
WBCs.[Footnote 1] Since then, the program has grown considerably. With 
a budget of approximately $12 million in fiscal year 2007, SBA funded 
awards to 99 WBCs in amounts ranging from $90,000 to $150,000. 

Congress created the WBC program in part due to the finding that 
existing business assistance programs for small business owners were 
not considered adequate to address women's needs. Private nonprofit 
organizations are eligible to apply for funds to set up WBCs, and 
successful applicants are awarded cooperative agreements to carry out 
program activities under the oversight of SBA's Office of Women's 
Business Ownership (OWBO) in SBA's Office of Entrepreneurial 
Development (OED).[Footnote 2] However, Congress and WBCs participating 
in the program have expressed concerns about the centers' ability to 
continue operating without SBA funding and about the uncertain funding 
structure of the program. Congress has made changes to the WBC program 
in several reauthorizations to extend the program since it was first 
established in 1988. In its 1999 reauthorization, Congress made a 
significant change by establishing the sustainability pilot program to 
make funding available to WBCs after the initial 5-year funding limit, 
which many believed did not offer WBCs enough time to become self- 
sustaining. Because the pilot also had a 5-year limit, WBCs could no 
longer receive funding from SBA after 10 years, and the pilot raised 
additional concerns because of uncertainty about its reauthorization 
and funding.[Footnote 3] In May 2007, to address the uncertainties 
about the pilot program, Congress replaced it by allowing WBCs-- 
including those that had "graduated" from the program--to receive 3- 
year renewable awards.[Footnote 4] 

While there have been changes in the WBC program's funding structure, 
the budget available for WBC awards has remained relatively constant 
for the past 5 years. During that same time, SBA has downsized and has 
fewer agency resources. Concerns have also been raised about whether 
SBA's business assistance programs are duplicating each other's 
efforts. In a previous report, we noted the need for the federal 
government, during this time of constrained resources, to reexamine 
federal programs that may have overlapping missions and 
responsibilities.[Footnote 5] The two other primary business assistance 
programs that SBA administers are the Small Business Development Center 
(SBDC) and SCORE (formerly called the Service Corps of Retired 
Executives) programs. These programs also provide training and 
counseling services to aspiring and existing small business owners but 
are not expected to target a particular group. Under the terms of the 
SBA award, WBCs are required to coordinate with local SBDCs and SCORE 
chapters when appropriate. 

To assist you in oversight of SBA programs and because of your interest 
in the WBC program, you requested that we evaluate key issues related 
to the program, including funding for WBCs and the potential for 
duplication among the WBC, SBDC, and SCORE programs. Accordingly, this 
report addresses (1) the uncertainties associated with the funding 
process for WBCs; (2) SBA's oversight of the WBC program, including 
policies and procedures for monitoring compliance with program 
requirements and assessing program effectiveness; and (3) the services 
that WBCs provide to small businesses and actions that SBA and WBCs 
have taken to avoid duplicating the services offered by the SBDC and 
SCORE programs. 

To address these objectives, we reviewed the legislative history of the 
WBC program, our previous reports, SBA's policies and procedures for 
administering the program, and studies of the program conducted by SBA, 
SBA's Office of Inspector General, and external organizations. For 7 of 
the 10 WBCs that we visited, we reviewed documentation that SBA uses to 
oversee WBCs and interviewed WBC officials about their services, 
relationship with SBA, and coordination with SBDCs and SCORE. We also 
interviewed SBA officials about the WBC, SBDC, and SCORE programs. In 
addition, we compared the statutory authority for the three programs; 
interviewed a random sample of 17 WBCs about their services, 
relationship with SBA, and coordination with SBDCs and SCORE; and 
visited 6 SBDCs and the SCORE national office. 

We conducted our work in California, Georgia, Illinois, Maryland, 
Massachusetts, Virginia, and Washington, D.C. between August 2006 and 
November 2007 in accordance with generally accepted government auditing 
standards. Appendix I discusses our scope and methodology in greater 
detail. 

Results in Brief: 

Recent legislation has addressed concerns about the uncertainty of 
funding WBCs. Until 2007, SBA funded WBCs on a temporary basis for up 
to 10 years at which time it was expected that the centers would become 
self-sustaining. When the WBC program was created by Congress in 1988, 
it began as a demonstration project that ended in 1991. In 1991, 
Congress authorized 3-year projects and in 1997, Congress authorized 
SBA to make annual awards to WBCs for up to 5 years. Because of 
concerns that WBCs could not sustain operations without continued SBA 
funding, in 1999, Congress created a pilot program to extend funding an 
additional 5 years, allowing successful WBCs to receive SBA funding for 
a total of 10 years. However, WBCs continued to face funding 
uncertainties. First, because WBCs sometimes established their 
operations with SBA funds and depended on SBA funds to leverage other 
support, many were concerned about whether they could continue 
operations after 5 to 10 years of receiving SBA funding. Second, the 
sustainability funding was a pilot program that had to be reauthorized 
each year, creating uncertainty about whether there was a commitment to 
continue the program. In 2007, the Office of Management and Budget 
(OMB) reported in its Program Assessment Rating Tool (PART) that 
frequent changes by Congress in the WBC program's funding structure, 
delays in extending sustainability funding, and uncertainty about the 
future had created challenges for the program.[Footnote 6] Recent 
legislation for the WBC program replaced the sustainability pilot 
program with 3-year renewable awards. WBCs that have graduated from the 
program after 10 years as well as those currently in the regular and 
sustainability pilot programs will be able to compete for the new 
awards. The new funding structure could increase competition, however, 
and exactly how much funding will be available in each future 3-year 
cycle is unclear. But the increased competition also provides an 
opportunity for SBA to continue funding high performing centers. 
Because the WBC program is a competitive discretionary award program, 
WBCs in the program compete annually for the maximum award amount but 
continue to receive SBA funds for the length of the project, as long as 
their performance is satisfactory. SBA has criteria for ranking new 
applicants and existing program participants for awards and is revising 
its award process to incorporate the new program changes. 

SBA has developed written procedures for assessing the performance and 
financial management activities of WBCs, but imbalances in its 
allocation of staff resources and ineffective communication limit 
assurances that WBCs are in compliance and meeting the program's 
requirements. To ensure that WBCs are meeting these requirements, SBA 
conducts semiannual programmatic and financial examinations and 
requires that WBCs submit quarterly reports on program activities, 
progress in meeting annual performance goals, and financial expenses 
that qualify for SBA reimbursement. SBA relies heavily on district 
office technical representatives (DOTR) to carry out oversight 
responsibilities, but we found indications that the current allocation 
of responsibilities was not effective, given the staff levels and 
expertise in SBA's district offices. First, some DOTRs may have too 
many responsibilities to be effective, particularly since they have 
other full-time agency responsibilities in addition to overseeing WBCs 
in their districts. Second, DOTRs conduct WBC programmatic and 
financial examinations for SBA, but some DOTRs lack the expertise to 
conduct the financial component of these examinations. Third, although 
most WBCs we interviewed spoke positively of their relationship with 
their DOTR, several told us that the reduction in district office 
staffing related to SBA's downsizing in recent years had led to staff 
changes. As a result, some of the newer DOTRs might not have relevant 
oversight experience. SBA has taken some steps to adjust program 
oversight procedures to adapt to its limited staff resources, but DOTRs 
continue to have a wide range of responsibilities and could be 
challenged in carrying them out effectively. In addition, some WBCs 
told us that communication with SBA headquarters officials did not 
provide what they needed to meet program requirements. One study that 
we reviewed reported that 54 percent of 52 WBCs responding to its 
survey said that SBA could improve its communication with the centers. 
To communicate with WBCs, OWBO conducts monthly conference calls with 
WBCs and DOTRs and uses e-mail to communicate policy changes and to 
request information. Some WBCs cited problems with these efforts. For 
example, some WBCs said that the conference calls were not a 
comfortable forum for asking questions and that clarifying SBA's 
changing program requirements was difficult. Also, several WBCs said 
that SBA had provided inconsistent information on setting annual 
performance goals and had not provided sufficient feedback on their 
performance. Ineffective communication led to confusion among WBCs 
about program requirements and increases the risk that they will not be 
in compliance with the requirements. 

We found that the WBCs we spoke with focused on a different type of 
client than the SBDCs and SCORE chapters in their areas, that several 
WBCs actively coordinated with the other programs to avoid duplicating 
services, and that other WBCs were concerned about how to coordinate. 
Consistent with the WBC program's statutory authority and SBA 
requirements, WBCs tailor services to meet the needs of socially and 
economically disadvantaged women. SBA's study of WBCs showed that they 
tended to serve clients with businesses that had fewer employees and 
lower revenues than SBDC and SCORE clients. As described in the terms 
of the SBA award, WBCs are required to coordinate with local SBDCs and 
SCORE chapters. In addition, SBA officials told us that they expected 
district offices to ensure that the programs did not duplicate each 
other. However, based on our review, WBCs lacked guidance and 
information from SBA on how to successfully carry out their 
coordination efforts. Most of the WBCs that we spoke with explained 
that in some situations they referred clients to an SBDC or SCORE 
counselor, and some WBCs also took steps to more actively coordinate 
with local SBDCs and SCORE chapters to avoid duplication and leverage 
resources. We learned that WBCs used a variety of approaches to 
facilitate coordination, such as memorandums of understanding, 
information-sharing meetings, and colocating staff and services. 
However, some WBCs told us that they faced challenges in coordinating 
services with SBDC and SCORE, in part because the programs have similar 
performance measures, and this could result in competition among the 
service providers in some locations. We also found that on some 
occasions SBA encouraged WBCs to provide services that were similar to 
services already provided by SBDCs in their district. Such challenges 
thwart coordination efforts and could increase the risk of duplication 
in some geographic areas. 

To ensure that SBA's oversight procedures for the WBC program are 
effective, we recommend that SBA reassess the responsibilities for 
oversight allocated to DOTRs. To improve communication with WBCs and to 
ensure that they understand program requirements, we recommend that SBA 
develop a communication strategy that would provide consistent 
information to WBCs. We are also recommending that SBA develop guidance 
on how its business assistance programs, including the WBC, SBDC, and 
SCORE programs, can effectively coordinate services and avoid 
duplication. We provided SBA with a draft of this report for review and 
comment. SBA provided no comments on the draft report or its 
recommendations. 

Background: 

The WBC program is administered through OWBO. The program was 
established by the Women's Business Ownership Act of 1988 to provide 
long-term training, counseling, networking, and mentoring to women who 
own businesses or are potential entrepreneurs after Congress found that 
existing business assistance programs for small business owners were 
not addressing women's needs. The program's goal is to add more well- 
trained women entrepreneurs to the U.S. business community and to 
specifically target services to women who are socially and economically 
disadvantaged. In fiscal year 2007, SBA funded 99 WBCs throughout the 
United States and its territories (fig. 1). 

Figure 1: WBCs in SBA's Program in Fiscal Year 2007: 

This figure is a map showing WBC's in SBA's program in fiscal year 
2007. 

[See PDF for image] 

Source: SBA (data); Art Explosion (map). 

Note: Nine of the 99 centers in SBA's program graduated at the end of 
fiscal year 2007. Not shown are one WBC in San Juan, Puerto Rico and 
one in Pago Pago, American Samoa. 

[End of figure] 

Private nonprofit organizations are eligible to apply for funds to set 
up WBCs, and successful applicants are initially awarded cooperative 
agreements for a maximum of 5 years. WBCs must raise matching funds 
from nonfederal sources such as state and local public funds, private 
individuals, corporations and foundations, and program income derived 
from WBC services.[Footnote 7] In the first 2 years of the 5-year 
award, each WBC is required to match SBA award funding at 1 nonfederal 
dollar for each 2 federal dollars. In the last 3 years, the match is 1 
nonfederal dollar for each federal dollar. Award amounts may vary 
depending upon a WBC's location, staff size, project objectives, 
performance, and agency priorities. However, awards cannot exceed 
$150,000 each fiscal year per recipient. 

WBC funding is performance-based, and each additional 12-month budget 
period beyond the initial award may be exercised at SBA's discretion. 
Among the factors involved in deciding whether to exercise an option 
for continued funding are the availability of funds, the extent to 
which past WBC funds have been spent, and satisfactory performance 
against SBA-established performance measures, including the number of 
clients served and jobs created. SBA requires WBCs to provide this 
performance data in quarterly reports. 

Under the sustainability pilot program, WBCs that had been receiving 
funding for 5 years could receive sustainability awards for an 
additional 5 years. Criteria for receiving awards under the pilot 
program were similar to those for receiving the initial awards. WBCs 
were assessed on their record of performance and had to provide 
nonfederal matching funds equal to 1 dollar for each federal dollar. 
Unlike the WBC regular award, WBC sustainability award amounts could 
not exceed $125,000 each fiscal year per recipient. As noted earlier, 
Congress recently replaced these sustainability awards with 3-year 
renewable awards. SBA has not yet begun making these new awards, which 
are a maximum of $150,000 each year per recipient. 

In addition to the WBC program, SBA's SBDC and SCORE programs also 
provide training and counseling services to small business clients. The 
SBDC program was created by Congress in 1980. SBDC services include, 
but are not limited to, assisting prospective and existing small 
businesses with financial, marketing, production, organization, 
engineering, and technical problems and feasibility studies. Each state 
and U.S. territory has a lead organization that sponsors and manages 
the SBDC program. The lead organization coordinates program services 
offered to small businesses through a network of centers and satellite 
locations in each state that are located at colleges, universities, 
vocational schools, chambers of commerce, and economic development 
corporations. In fiscal year 2007, the SBDC program received $87 
million to make awards to 63 lead SBDCs throughout the United 
States.[Footnote 8] 

The SCORE program was founded in 1964 as a nonprofit organization. 
Under the Small Business Act, as amended, SCORE is sponsored by and may 
receive appropriations through SBA. The SCORE program is designed to 
provide free expert advice to prospective and existing small businesses 
in all aspects of business formation, advancement, and problem solving. 
SCORE counselors are volunteers who assist clients through a Web site, 
SCORE chapter offices, SBA district offices, and other establishments. 
In fiscal year 2007, the SCORE program received $5 million to support 
its activities and currently has 389 chapters throughout the United 
States. 

SBA's Office of Small Business Development Centers and Office of 
Business and Community Initiatives are components of OED, along with 
OWBO, and oversee the SBDC and SCORE programs, respectively. SBA's 
Division of Procurement and Grants Management (DPGM) monitors financial 
activities and transactions and maintains award files for most of SBA's 
award programs.[Footnote 9] The Office of SBDCs has its own grants 
specialists that conduct similar activities. With respect to the WBC 
program, DPGM is involved in, among other aspects, reviewing and making 
decisions on new WBC applications, providing final approval for all 
contracts, analyzing proposed budgets and negotiating budgets with 
OWBO, issuing modifications to terms and conditions of awards, 
reviewing matching funds documentation, and reviewing WBC financial 
reports and payment requests to authorize payment. 

Recent Legislation Addressed Concerns about the WBC Program's Funding: 

Before Congress passed recent legislation addressing concerns about 
long-term funding for WBCs, the WBC program's funding structure had 
been in flux since its inception in 1988. In establishing the WBC 
program in 1988, Congress authorized SBA to help private nonprofit 
organizations conduct projects that benefit small business concerns 
owned and controlled by women. The 1988 act allowed for SBA to fund 
demonstration projects that terminated in 1991. However, in 1991, 
Congress authorized SBA to make awards for 3-year projects, and in 
1997, Congress authorized SBA to make awards to WBCs for 5-year 
projects. In its 1999 reauthorization of the WBC program, as noted 
earlier, Congress added 5-year sustainability funding for WBCs that 
successfully completed 5-year projects to provide additional time for 
the centers to become self-sustaining (fig. 2). WBCs continue to 
receive SBA funds for the 5-year period as long as their performance is 
satisfactory although under the performance-based system, the award 
amount can vary from year to year. 

Figure 2: WBC Program Legislative Timeline: 

This figure is a women's business center legislative timeline between 
1988 and 2007. A few years are highlighted on the timeline: 

1998: The Women's Business Ownership Act of 1988 attended the Small 
Business Act to create the Women's Business Center (WBC) program with 
demonstration projects that would expire in 1991; 

1991: The Women's Business Development Act of 1991 made WBC's 3-year 
projects; 

1997: The Small Business Reauthorization Act of 1997 extended WBC 
projects to 5 years. 

1999: The Women's Business Centers Sustainability Act of 1999 created 5-
year sustainability pilot projects awarded to WBC's that had completed 
the first 5-year project; 

2007: The U.S. Troops Readiness, Veterans' Care, Katrina Recovery, and 
Iraq Accountability Appropriations Act amended the Small Business Act 
to repeal the sustainability pilot program and to permit WBC's to 
receive SBA funding on a continual basis. 

[See PDF for image] 

Source: GAO analysis of WBC program legislation. 

[End of figure] 

WBCs that we spoke with identified two related factors that had largely 
been responsible for their funding uncertainties. First, because until 
recently the WBC program offered limited-term funding--in contrast to 
the SBDC and SCORE programs, which receive continuous funding--WBCs 
graduated from SBA support after 5 or 10 years. Second, Congress did 
not make the additional 5-year term for sustainability funding 
permanent. Instead, Congress extended the pilot program with each SBA 
reauthorization, raising concerns among the WBCs about its commitment 
to the program. Several WBCs that we spoke with expressed concern about 
the funding term limits and pointed out that the SBDC and SCORE 
programs did not have the same limits, even though SBA also administers 
those programs. Some WBCs in both the regular and sustainability 
programs also said that they were concerned about their ability to 
continue operations after losing SBA support. Because WBCs sometimes 
established their operations with SBA funds and depended on SBA funds 
to leverage other support, many were concerned about their ability to 
continue operations after 5 to 10 years of receiving SBA funding. One 
center that was receiving sustainability funds said that long-term 
funding would allow WBCs to continue operating without concerns of an 
end date after taking years to develop a valuable program. The center 
director added that a short-term program was less practical for the 
service that the WBC program provides, because it takes time to have 
client successes. Another center that graduated from SBA's program in 
2007 told us that although SBA funding had decreased each fiscal year, 
the WBC's membership in SBA's program and the funds it received were 
beneficial to the center's ongoing success. One center president said 
that seamless funding for the program would greatly benefit centers 
that were meeting the needs of their communities, and the director of 
another center that was in the process of applying for sustainability 
funding told us that she was anxious to see the recent legislative 
changes that would make SBA funding for WBCs permanent. A district 
office official that we spoke with echoed the WBCs' concern about 
sustainability, noting that the long-term viability of the WBC he 
oversaw might be threatened after the center graduated from SBA's 
program in 2007. 

The WBC program's funding structure also created uncertainty that 
limited SBA's ability to manage the program effectively. OMB's 2007 
PART report found that frequent changes by Congress in the WBC 
program's funding structure, delays in extending sustainability 
funding, and uncertainty about the future had created challenges for 
the program.[Footnote 10] OMB's report also noted that SBA had taken 
steps to foster more consistent management of the WBC program, but 
added that long-term planning was problematic because of the program's 
funding structure. When we spoke with officials at OMB, they emphasized 
that SBA appeared to be making a significant effort to assist WBCs, 
given the program's limitations. The officials also noted that the 
funding challenges that WBCs faced after graduating from the 
sustainability pilot could be related to the fact that these 
organizations operated resource-intensive programs and collected 
nominal revenues in program fees, largely because of their focus on 
economically disadvantaged clients, causing them to rely heavily on 
external support. 

SBA will fund WBCs through the project term, subject to availability of 
funds, and our review indicates that WBCs that perform satisfactorily 
will continue to receive funds until they complete the program. SBA 
officials provided us with a list of eight centers that had terminated 
prior to completing the program and noted that the program had funded a 
total 150 WBCs since its inception. However, SBA officials in 
headquarters and the district offices were aware of the challenges WBCs 
faced in planning annual budgets without knowing how much they would 
receive or whether sustainability funds would continue to be available. 
According to SBA, two of the eight centers that left the program did so 
as a result of challenges securing matching funds, and one WBC not 
included in SBA's list left the program during our review, in part due 
to funding challenges. In discussing the WBC program's limited-term 
funding, some SBA district office officials emphasized that the agency 
had invested in creating successful WBCs and should be working to make 
those that performed well permanent SBA partners. 

As we have seen, recent legislation for the WBC program replaces the 
sustainability pilot program with 3-year renewable awards, providing an 
opportunity for SBA to continue funding WBCs. Current program 
participants and those that have successfully graduated will be 
eligible to apply for continuous funding through these 3-year awards 
(table 1). SBA officials told us that by the end of fiscal year 2007, 
21 WBCs that have graduated since the beginning of the program would be 
eligible to apply for the renewable awards. The award process will 
remain competitive, and the maximum amount for renewable awards will be 
$150,000 each year per recipient, as in the first 5 years of the WBC 
program. Also, the number of organizations competing could increase, 
but SBA's annual budget for the WBC program may not increase beyond the 
approximate $12 million provided in the past 5 years. However, 
increased award competition provides an opportunity for SBA to continue 
funding high-performing centers. Prior to the new program changes, SBA 
officials emphasized that the WBC program is the agency's only 
performance-based program and said that they believed this fact 
provided an incentive for WBCs to continuously improve. Because the WBC 
program is a competitive discretionary award program, WBCs in the 
program compete annually for the maximum award amount but continue to 
receive SBA funds for the length of the project as long as their 
performance is satisfactory. SBA has criteria for ranking new award 
applicants and performance-based criteria for placing existing program 
participants into three funding categories for annual awards. In 
September 2007, SBA made WBC awards for fiscal year 2007 to fund 
activities in fiscal year 2008, and SBA officials told us that they 
plan to begin providing the 3-year renewable awards in fiscal year 2008 
as soon as practicable after appropriations are received. 

Table 1: WBC Program Legislative Changes by Center Status: 

WBC status: New program applicants; 
Old program: Eligible to apply for an initial 5-year term; 
New program: Eligible to apply for an initial 5-year term. 

WBC status: Award recipients in the regular program; 
Old program: Eligible to apply for a second 5-year term after 
successful completion of the initial 5-year term; 
New program: Eligible to apply for renewable 3-year awards after 
successful completion of the initial 5- year term. 

WBC status: Award recipients in the sustainability pilot program; 
Old program: Graduate from sustainability after successful completion 
of the second 5-year term; 
New program: Eligible to apply for renewable 3- year awards after 
successful completion of the second 5-year term. 

WBC status: Centers that successfully graduated from the sustainability 
pilot program; 
Old program: N/A; 
New program: Eligible to apply for renewable 3-year awards. 

Source: SBA; The U.S. Troop Readiness, Veterans' Care, Katrina 
Recovery, and Iraq Accountability Appropriations Act, 2007. 

[End of table] 

As a result of the new legislation, which allows graduated WBCs to 
reenter the pool of applicants for continuous funding and changes the 
existing 5-year sustainability project terms going forward, SBA has 
begun revising its existing WBC award process. SBA officials said that 
they would have to create a new program announcement and update other 
documents to reflect the new program structure, and that they also 
anticipated revising the qualifying criteria and adding new 
considerations because they expected the competition for awards to 
increase with the availability of continuous funding. 

SBA Has Oversight Procedures in Place, but Imbalances in Its Staff 
Resources and Ineffective Communication with WBCs Have Hindered Their 
Effectiveness: 

SBA has developed oversight procedures for the WBC program, but 
imbalances in the agency's staff resources for WBC oversight and 
ineffective communication with WBCs reduce the effectiveness of these 
procedures. SBA's oversight of WBCs includes ongoing assessments for 
performance-based funding, as required by the act authorizing the 
program; and SBA has requirements for WBCs to report quarterly on their 
program activities, performance, and finances. Although SBA had these 
oversight procedures in place, its staff resources for the WBC program 
have been limited, with the agency relying heavily on district office 
staff who may have too many responsibilities or lack relevant 
experience and training. Also, ineffective communication with WBCs has 
led to confusion about how to meet program requirements and on how 
their performance is being assessed. 

SBA's Oversight of WBCs Includes Ongoing Performance Assessments and 
Reporting Requirements: 

We found that SBA had developed written procedures for assessing the 
performance and financial management activities of WBCs and had taken 
steps to measure the WBC program's effectiveness. Since 1997, as a 
condition of continued funding, SBA has been required to assess WBCs' 
performance at least annually through programmatic and financial 
examinations, and SBA District Office Technical Representatives (DOTR) 
conduct these examinations semiannually, typically on site at the WBC 
location.[Footnote 11] SBA's policies and procedures for the WBC 
program require the district office to make a recommendation on 
continued SBA funding for the WBC in the final or second examination 
report each year. As an added measure, SBA also requires WBCs to have 
an independent certified public accountant (CPA) certify the condition 
of their financial management system each year as part of the final 
programmatic and financial examination. We reviewed fiscal year 2006 
final examination reports for 7 of the 10 WBCs that we visited and 
verified that the examination included a checklist of questions on the 
WBC's personnel and facilities, financial management--including details 
of the funding match, data collection, program activities, and Web site 
support and other Internet activity. None of the examination reports 
that we reviewed included a recommendation from the district office 
that SBA discontinue funding to the WBC. 

In addition to conducting semiannual examinations, SBA requires that 
WBCs submit quarterly reports on their program activities, performance, 
and financial status and transactions. Quarterly program activity 
reports include data on counseling, training, and information 
transfers; and SBA requires WBCs to report these data directly through 
its Entrepreneurial Development Management Information System (EDMIS) 
database.[Footnote 12] Most of the WBCs that we spoke with said that 
they tracked and maintained program data in a separate internal 
database and later uploaded the data to EDMIS for SBA reporting. The 
information that WBCs are required to provide in quarterly performance 
reports includes the WBCs' actual accomplishments, compared with their 
performance goals for the reporting period; actual budget expenditures, 
compared with an estimated budget; cost of client fees; success 
stories; and names of WBC personnel and board members. Fourth quarter 
performance reports must also include a summary of the year's 
activities and economic impact data that the WBCs collect from their 
clients, such as number of business start-ups, number of jobs created, 
and gross receipts. SBA reports some of these data in its annual 
performance reports to Congress through several output and outcome 
measures that are meant to reflect the WBC program's performance and 
effectiveness (table 2). Quarterly financial reports detail the WBCs' 
financial status and program expenses that qualify for SBA payment 
under the terms of the award. Fourth quarter financial reports may 
include adjustments to previous financial reports for the program year. 
Quarterly reporting is directly tied to the WBCs' ability to access 
their award funds. OWBO and DPGM review WBC quarterly reports and 
separate award payment requests, and DPGM has the authority to 
authorize WBC requests for advance or reimbursement payments. 

Table 2: Examples of SBA's Fiscal Year 2007 Output and Outcome 
Performance Measures for WBCs: 

Outputs: 
* Increase in total number of clients counseled and trained; 
* Increase in total number of clients counseled and trained online; 
* Total number of counseling and training hours; 

Outcomes: 
* Number of start-up business concerns formed; 
* Gross receipts of assisted concerns; 
* Employment increases or decreases of assisted concerns; 
* Increases or decreases in profits of assisted concerns. 

Source: SBA. 

[End of table] 

As noted, SBA reports to Congress annually on the performance of the 
WBC program. In addition to collecting output and outcome data from 
WBCs, and as part of a broader impact assessment of its business 
assistance programs, in 2004 SBA initiated a 3-year longitudinal study 
of the WBC program that surveys the program's clients. In our review of 
the WBC portion of reports for the first 2 years of the study, we found 
that although the study had a sound design, low response rates from WBC 
clients in the second report may limit SBA's ability to generalize the 
results to all WBCs. Appendix II includes additional information on our 
review of SBA's study and other studies assessing the economic impact 
of WBCs and discusses the difficulty of obtaining high response rates 
from private citizens for voluntary surveys. 

SBA Has Limited Staff Resources for the WBC Program and Relies Heavily 
on District Office Staff Who May Have Too Many Responsibilities or Lack 
Relevant Experience and Training: 

Within OWBO, program managers monitor a caseload of WBCs that are 
grouped by geographic region and perform a variety of functions such as 
communicating with the centers and DOTRs, reviewing WBC documents and 
maintaining a project file for each center, and coordinating with DPGM 
on funding matters. However, SBA relies heavily on its district 
offices, and specifically DOTRs, to carry out many WBC program 
responsibilities, although OED and OWBO do not have direct supervision 
of district office staff. Rather, SBA's Office of Field Operations 
oversees the district offices and district directors assign 
responsibilities to individual staff. In 2001, we reported that DOTRs 
had been given an increased role in assessing WBCs' performance to 
ensure that the programs were fiscally sound and functioning smoothly. 
To this end, we reported that DOTRs were receiving intensive training 
each year at the postaward conference at SBA headquarters on how to 
monitor the WBCs' programmatic and financial activities. As noted 
earlier, DOTRs are expected to conduct the WBCs' programmatic and 
financial examinations semiannually, but they also have other WBC 
program duties and other full-time agency responsibilities. District 
directors assign the role of DOTR as a collateral duty to district 
office staff, and DOTRs whom we met with held separate positions as 
business development specialists and assistant district directors. SBA 
has a list of 23 responsibilities for DOTRs, some of which involve 
oversight, including (1) reviewing WBCs' requests for project 
revisions, (2) determining the extent to which WBCs are meeting the 
match requirement, (3) reviewing the scope and quality of services 
provided to clients, (4) reviewing all WBC signage and media, and (5) 
helping to resolve problems. According to the list of responsibilities 
provided to us, DOTRs are also expected to act as advocates for the 
WBCs within their district. Some of the responsibilities related to 
this role include (1) ensuring that the district office displays and 
distributes WBC brochures; (2) collecting success stories from WBCs to 
be used for publicizing the program; and (3) including WBCs in district 
office conferences, workshops, and other events for women business 
owners. SBA officials told us that ideally DOTRs should focus on the 
oversight responsibilities and act as a liaison between WBCs and the 
district office. In the past, district offices also had a Women's 
Business Ownership Representative (WBOR) who would act as an advocate 
for all activities involving women's business issues. However, SBA 
officials and some district offices that we spoke with said that this 
role was often performed by the same person who was the DOTR. OED and 
OWBO officials said that since they do not control the assignment of 
staff responsibilities, they could not influence whether a district 
office employee acted both as an overseer and advocate for WBCs. 

The DOTR's total responsibilities for the WBC program appear to be 
substantial, particularly since these responsibilities are part of a 
collateral role. Given SBA's downsizing in recent years, some DOTRs may 
have more responsibilities than they had in the past, making it more 
challenging to perform their WBC program duties effectively. Others new 
to the role may lack the necessary experience and training or carry out 
DOTR responsibilities by default. For example, an assistant district 
director, who was familiar with the WBC in his district, told us that 
he had performed the role of DOTR for less than a year. He also said 
that he had previously supervised the DOTR, WBOR, and two other 
positions. The DOTR had retired in fiscal year 2005, and another staff 
member who had filled the position temporarily was no longer with SBA. 
The WBOR had also left the agency, and neither position had been 
filled. Although most WBCs we interviewed spoke positively of their 
relationship with their DOTR, several told us that reductions in 
district office staff had led to changes, including assigning DOTR 
responsibilities to a different district office staff member. DOTRs 
still attend required training for the WBC program annually at SBA 
headquarters, and SBA provides them with a handbook to assist them in 
performing their duties. However, three of the six DOTRs that we spoke 
with said that SBA's training for DOTRs in WBC oversight had not always 
been adequate. One DOTR said that there had been recent improvements 
but that past training assumed that new DOTRs had prior knowledge of 
the WBC program. The other two DOTRs made similar statements, with one 
pointing out that a lack of guidance had led to challenges in 
monitoring the WBC in her district at the time that she first assumed 
the role of DOTR. In one location, the DOTR and other district office 
staff told us specifically that they did not feel that DOTRs were 
adequately trained to conduct the financial component of WBC 
programmatic and financial examinations, adding that SBA headquarters 
had previously coordinated financial examinations for WBCs.[Footnote 
13] 

A 2003 SBA Office of Inspector General (OIG) audit of a Texas WBC found 
that the center had misused award funds and that SBA had not adequately 
monitored its financial and accounting operations.[Footnote 14] The OIG 
report on the audit specifically noted that the SBA reviewer had 
concluded that the center had a good financial and client tracking 
record system, in contrast with the audit's finding that the center's 
financial reporting lacked the standards reasonably expected of such an 
entity. The report also noted that the district office personnel 
assigned to perform oversight of the WBC did not have the financial 
background or proper training to perform financial reviews. When we 
followed up with OWBO officials, they said that SBA added the 2004 
requirement that a CPA review WBCs' financial records annually both 
because the agency recognized that some DOTRs lacked this expertise and 
because there had been isolated incidents of mismanagement of WBC award 
funds. The CPA reviewing a WBC's records must complete and sign a 
statement in the final examination report stating whether the records 
were found to be acceptable in accordance with federal standards. OWBO 
officials also told us that they were coordinating with SBA's Office of 
SBDCs to use SBDC financial examiners for these on-site financial 
reviews of WBCs, but added that recently there had not been enough 
staff to do all of the reviews. The officials also said that OED was 
reviewing how future financial audits for all of SBA's business 
assistance programs would be conducted. 

When we reviewed examination reports for 7 of the 10 WBCs that we 
visited, we found some inconsistencies that may suggest the need for 
more practical and ongoing DOTR training. First, in one report, the 
DOTR noted that the funding match requirement did not apply to a WBC 
because the center did not charge fees for SBA-sponsored programs and 
therefore did not generate funds from such programs. As noted 
previously, SBA's funding match requirement applies to all WBCs in its 
program, with the ratio changing from 1 nonfederal dollar for each 2 
federal dollars in years one and two to 1 nonfederal dollar for each 
federal dollar in year three and thereafter. We followed up with the 
WBC, and the center director verified that the WBC did charge fees for 
WBC program offerings and was meeting its match requirement. Second, we 
found that most of the final examination reports did not include a 
CPA's statement and that two reports included a note stating that the 
certification would be forthcoming because the CPA was unavailable on 
the review (examination) date. 

We found that SBA had taken some steps to adapt WBC program oversight 
procedures to its limited staff resources and to increase efficiency in 
some areas. For example, until January 2006 DOTRs conducted 
programmatic and financial examinations quarterly, and SBA switched to 
semiannual examinations to conserve its staff resources. SBA officials 
told us that staff resources for WBC program oversight had been 
strained for some time, and that OWBO recently received approval to 
fill two vacant positions and was currently determining the roles and 
responsibilities for these new staff. OWBO currently has five program 
managers that monitor a caseload of between 15 and 30 centers each. In 
March 2007, SBA also revised its reporting procedures for WBCs to 
streamline communication and to reduce review and processing times. For 
example, WBCs previously submitted original payment requests to the 
DOTR for review and recommendation, the DOTR forwarded the paperwork to 
OWBO for review and recommendation, and OWBO then forwarded the 
paperwork to DPGM for approval. As a result of complaints from WBCs and 
DOTRs regarding delayed award payments and misplaced WBC paperwork, SBA 
revised this procedure, and WBCs now submit original payment requests 
directly to OWBO. OWBO reviews the paperwork and makes a recommendation 
for payment, forwarding the paperwork to DPGM for authorization and 
notifying the DOTR and WBC of the recommendation. Both WBCs and DOTRs 
that we spoke with following SBA's revision of its payment request 
procedure said that the new procedure had significantly improved 
communication. 

The new procedures also improved payment turnaround times. Many of the 
WBCs that we spoke with mentioned that they had experienced challenges 
with receiving payments in a timely manner. As noted, SBA was aware of 
this issue. During the course of our review, the SBA OIG conducted a 
study looking at award disbursements to WBCs for fiscal years 2004 
through 2007, surveying 21 of the 99 centers in SBA's program in fiscal 
year 2007. The OIG's preliminary report, which was based on responses 
received from 18 of the centers, found that in fiscal years 2005 and 
2006, the majority of SBA's payments to WBCs were not made in a timely 
manner.[Footnote 15] The study did not determine the percentage of 
payment delays that were caused by SBA's untimely processing or the 
percentage that were caused by errors the WBCs may have made in 
submitting their paperwork. However, the OIG is making recommendations 
for SBA to improve its reimbursement process. In a September 2007 
congressional testimony addressing the challenges facing the WBC 
program, the Associate Administrator for OED pointed out that while the 
size of the WBC network had grown from an initial 13 centers in 1989, 
SBA's resources assigned to OWBO and DPGM had declined due to 
reductions in SBA's overall budget. He also noted that as a result, the 
WBC program had outgrown its original set of policies and procedures, 
and OWBO faced challenges in managing and supporting the program. 
Continued imbalances in SBA's staff resources for the WBC program, 
including the agency's significant reliance on DOTRs, could reduce 
assurances that its oversight of WBCs is effective and that WBCs are 
meeting the program's requirements. 

Ineffective Communication from SBA Led to Confusion about WBC Program 
Requirements and Performance Reviews: 

The WBCs that we spoke with also raised issues related to SBA's 
communication on program procedure and their performance. One study we 
reviewed reported that 54 percent of 52 WBCs surveyed said that SBA 
could improve its communication with them.[Footnote 16] Timely and 
thorough communication of operational procedures is critical to 
ensuring that the agency and the WBCs are able to perform their 
responsibilities effectively. Our Standards for Internal Control in the 
Federal Government state that for an entity to run and control its 
operations, it must have relevant, reliable, and timely communications 
relating to internal as well as external events. For external 
communication, agency management should ensure that there are adequate 
means of communicating with and obtaining information from external 
stakeholders that may have a significant impact on the agency achieving 
its goals.[Footnote 17] 

OWBO conducts monthly conference calls with the WBCs and DOTRs, and SBA 
officials said that the calls were intended to maintain contact with 
the centers and to provide program updates and information on best 
practices. OWBO program managers facilitate the conference calls each 
month; and SBA officials also said that they send an agenda and 
handouts to DOTRs and WBCs electronically, prior to making the calls, 
and record the calls so that the information is available later. We 
reviewed handouts from conference calls that OWBO conducted between 
February and July 2007 and noted that program updates and best practice 
presentations were included on some of the calls. However, when we 
spoke with WBCs about the calls, some told us that the calls were not 
meeting their communication needs. Three of the WBCs that we spoke with 
said that best practice presentations that allowed them to share 
information with other centers were helpful. Others said that the calls 
were less effective because administrative items were typically covered 
instead of new information. Although WBCs have an opportunity to ask 
questions during the calls, the WBCs that we spoke with had mixed 
opinions about whether monthly conference calls provided a good forum 
for asking questions. One experienced WBC said that questions unrelated 
to the call agenda sometimes caused the discussion to be sidetracked 
and suggested that OWBO officials address such questions off-line. The 
WBC director also said that the varying experiences of the WBCs 
participating resulted in the calls being more effective for some 
centers than for others and suggested that OWBO consider restructuring 
the calls by WBC experience (years in the program) to provide a more 
productive learning experience. SBA officials told us that in January 
2007, as an opportunity to provide necessary instruction to newer 
DOTRs, OWBO reinstated separate conference calls for DOTRs, although 
they can still participate in the WBC conference calls. 

OWBO also uses e-mail to communicate policy changes to the WBCs and 
DOTRs and to make interim information requests of the WBCs, but some 
WBCs told us that they had difficulty clarifying changes to 
requirements and that SBA's communications were often insufficient. 
Several WBCs said that SBA had not responded in a timely manner when 
they submitted payment requests and other administrative paperwork and 
that such delays resulted in financial burden and led to confusion 
about whether they had followed appropriate procedure and met program 
requirements. For example, one WBC director said that the center's 
request for an advance payment was denied because she incorrectly 
submitted the request to the DOTR during SBA's procedural changeover 
and had not yet been notified of the revised procedure, which required 
the request to go directly to OWBO. According to the WBC director, the 
DOTR was out of the office during the week that she submitted the 
request, and DPGM denied the request several weeks after receiving it 
because it reached DPGM after the deadline. The WBC director said that 
she received no notification of receipt from DPGM until the request was 
denied. 

While SBA removed the DOTRs from the payment request procedure to 
eliminate potential bottlenecks, this action has not completely 
resolved WBCs' concern about communications with SBA headquarters 
offices. Another WBC director who identified communication issues with 
SBA when we initially spoke with her, later told us that the recent 
procedure revisions had eliminated some of the confusion caused by 
multiple layers of approval for payment requests but noted that the WBC 
still had difficulty with DPGM's denying requests without any 
communication about items it may identify once the paperwork reached 
that office. The Associate Administrator for OED highlighted the 
revised payment request procedure as an example of recent efforts to 
address inefficiencies, saying that the processing of payment requests 
had also been centralized to one point of contact in OWBO. He added 
that OWBO had initiated a prescreening process to identify missing 
documentation prior to reviewing the payment request and said that 
OWBO's new policy of notifying the WBC when a payment request had been 
forwarded to DPGM would increase transparency. In agreement with the 
OED official's statement, the WBC director said that OWBO appeared to 
have a clearer understanding of DPGM's requirements in conducting its 
initial review of payment requests and that OWBO had not denied any 
recent requests. However, the WBC director said that DPGM had still 
denied requests for minor items that the WBC became aware of during a 
self-initiated follow-up with DPGM. For example, the WBC director said 
that in one instance DPGM would not accept copies of forms for which 
the WBC previously submitted originals that were either lost or 
misplaced by OWBO. According to the WBC director, OWBO intervened to 
resolve this particular issue. 

It appears that limited communication within SBA has played a role in 
some WBC communication issues, and the SBA OIG's preliminary report 
found that until recently the agency lacked an integrated tracking 
mechanism to identify when a payment request was received, where it was 
in the review process, and whether a disbursement had been made within 
the required time frame. One DOTR also told us that there were 
opportunities for SBA headquarters to improve its communication with 
DOTRs on policy and procedural changes to assist DOTRs in their role, 
and a WBC director said that she would like to see improved 
communication between SBA headquarters and its district offices, noting 
that some changes to paperwork requirements and program policy had not 
been communicated to the district offices. 

In addition to communication issues related to payment requests and 
other administrative procedures, several WBCs told us that SBA had 
provided inconsistent communication on setting annual performance 
goals. SBA has established procedures for OWBO to negotiate annual 
performance goals with WBCs as they work toward accomplishing their 5- 
year project goals. Prior to fiscal year 2008, SBA's requirement was 
that WBCs establish a goal of increasing several performance measures 
by 10 percent each year over the 5-year period of the award. One WBC 
said that for fiscal year 2007, the district office had requested that 
the WBC serve over 250 additional clients after OWBO and the WBC had 
agreed to a 10 percent increase over the goal for fiscal year 2006. The 
WBC director expressed concern that they had followed program 
guidelines in setting the initial goal; had not received an official 
explanation for the revised goal; and had received a smaller award than 
for the previous year, although they would have to serve many more 
clients. She said that when the WBC inquired about the change at the 
district office, they were told that the new goal was an OWBO goal. 
Another WBC said that the district office had communicated revised 
goals for fiscal year 2006 but was unable to explain the basis for the 
new goals. The director of this WBC said that the new goals were 
subsequently retracted without any official communication from SBA. A 
third WBC specifically noted that several years ago, SBA had issued a 
midyear requirement that WBCs package a certain number of loans. 
Although the WBC had been packaging loans, this requirement was not a 
WBC program measure, and the WBC did not include loan packaging in its 
annual goals. The WBC director said that the added requirement forced 
WBCs to comply with a goal they had not been working toward previously, 
and the director added that the requirement would have been especially 
difficult for smaller centers that may have added staff and other 
resources to package loans, particularly since this was not a permanent 
program requirement. When we followed up with OWBO officials, they told 
us that the district offices had sometimes communicated different goals 
to the WBCs to assist them with meeting district office goals, but that 
the district offices' goals were set by SBA's Office of Field 
Operations, which is a separate office in SBA outside of OED and OWBO. 
One district office staff member did tell us that the district office 
would like the WBCs to be more involved in helping the district office 
to meet its goals as part of a joint effort in meeting the needs of 
their local communities. OWBO officials did not address a solution for 
the miscommunication of goals, but in agreement with what some WBCs 
told us, OWBO officials said that they recognized that it was 
unrealistic for WBCs to continue to increase their goals each year 
while receiving smaller awards. The officials said that OWBO is 
revising its formula for WBCs to set annual goals, and removed the 10 
percent increase requirement in its fiscal year 2007 program 
announcement for centers that will be funded in 2008. They also said 
that OWBO would begin to consider prior year funding amounts in setting 
achievable goals. 

Some WBCs also told us that they were not sure how well they were 
performing because SBA did not provide them with feedback on semiannual 
programmatic and financial examinations or the reports that they 
submitted quarterly. One WBC told us that SBA did not provide details 
on how programmatic and financial examination results were used to 
place the center in a particular funding category, and another WBC said 
that SBA should provide appropriate feedback to let the WBCs know what 
they were doing well or could do better. The second WBC pointed out 
that it could not tell whether anyone was actually reviewing the 
reports that it submitted to SBA. SBA officials told us that they were 
aware of the WBCs' concern regarding a lack of performance feedback and 
would take steps to make the WBC program's performance-based funding 
process more transparent. SBA's ineffective communication with the WBCs 
and between its offices that oversee the WBC program has led to 
confusion among WBCs, limiting their understanding of the program's 
requirements and potentially reducing their ability to effectively 
carry out these requirements. 

WBCs Make Some Efforts to Coordinate with SBDCs and SCORE, but SBA 
Provides Limited Guidance to Support These Efforts: 

The WBCs that we spoke with focused on a different type of client than 
the SBDCs and SCORE chapters in their areas, and several WBCs actively 
coordinated with the other programs to avoid duplicating services. 
Consistent with SBA requirements and statutory authority, WBCs tailor 
services to meet the needs of socially and economically disadvantaged 
women and tend to serve clients with businesses that have fewer 
employees and lower revenues than clients of SBDCs and SCORE. Though 
WBCs serve different types of clients, most WBCs told us that they 
refer clients to and coordinate services with SBDCs and SCORE when 
appropriate to leverage resources and avoid duplication. Also, some of 
the coordination efforts were facilitated by the SBA district office, 
but we found that SBA provided limited guidance to WBCs on how 
coordination should occur. In addition, coordinating services can be 
difficult because WBCs, SBDCs, and SCORE have similar performance 
measures, which could lead to competition among the service providers 
in some locations. We also found that on some occasions, SBA encouraged 
WBCs to provide services that were similar to services already provided 
by SBDCs in their district. These issues and the lack of sufficient 
guidance could create barriers to coordination and increase the risk of 
duplication in some locations. 

The WBC, SBDC, and SCORE Programs Provide Training and Counseling to 
Small Business Clients, but Have Different Target Groups: 

Like SBDCs and SCORE chapters, WBCs provide both counseling and 
training services to small business clients. Unlike SBDC and SCORE, 
however, WBCs tended to target services to women, socially and 
economically disadvantaged clients, and clients with smaller 
businesses. Our review of the statutory authorities governing the WBC, 
SBDC, and SCORE programs found that each of the programs is required to 
provide training and counseling, but the WBC program's statutory 
authority requires SBA to evaluate WBCs on, among other things, their 
ability to target services to socially and economically disadvantaged 
clients.[Footnote 18] Consistent with the WBC program's statutory 
authority and SBA requirements, WBCs targeted services to socially and 
economically disadvantaged clients. A study of WBCs conducted by the 
Center for Women's Leadership at Babson College also confirmed that 
WBCs responding to its survey predominantly served socially and 
economically disadvantaged clients.[Footnote 19] According to the 
Babson College study, 67 percent of WBC clients came from households 
with incomes that were less than $50,000, and 55 percent of WBC clients 
had a high school diploma or less education. 

Three WBCs that we spoke with were able to provide support to socially 

and economically disadvantaged clients through financial literacy, 
savings, and credit repair programs. For example, a WBC in California 
had a program that provided financial literacy and asset building 
services for its economically disadvantaged small business clients. 
Through this program, clients were able to attend financial literacy 
courses while gradually increasing their savings through an individual 
development account and savings club program. The individual 
development account and savings club program allowed low-income clients 
to receive matching funds to save toward the purchase of a home or to 
start a small business. 

Consistent with the program's statutory authority, we also found that 
WBCs tended to focus their programs on female clients. A study 
contracted by SBA on the impact of the WBC program reported that women 
made up 77 percent of WBC clients.[Footnote 20] The Babson College 
study also reported that the WBCs responding to its survey tailored 
their programming to meet the needs of women clients.[Footnote 21] 
Consistent with the findings of the SBA and Babson College studies, 
several WBCs that we contacted provided services specific to the needs 
of women clients. For example, a few WBCs had women's networking or 
mentoring groups so that experienced women entrepreneurs could share 
advice with those who were new women business owners. 

WBCs also tended to offer services that helped clients start and expand 
existing microenterprises or very small businesses. For example, a WBC 
in Chicago established a program to help its clients start home-based 
child care centers, and a WBC in Baltimore helped low-income clients 
with existing informal home-based businesses expand and increase their 
income in order to assist them with becoming economically self- 
sufficient. SBA's impact study of WBCs also showed that they tended to 
serve clients with businesses that had fewer employees and lower 
revenues than clients of SBDCs and SCORE. According to the study, WBC 
clients had businesses with an average of 2.5 employees and an average 
revenue of $63,694. In contrast, SCORE worked with businesses with an 
average of 3.2 employees and $112,182 in average revenue, and SBDC 
worked with businesses with an average of 6.3 employees and $272,552 in 
average revenue.[Footnote 22] 

We found that some WBCs offered services for clients with limited 
business experience. WBC directors interviewed for the Babson College 
study also reported that WBC clients had distinct needs that often 
reflected a lack of experience in the business world. Several WBCs that 
we contacted provided intensive long-term training and counseling to 
help clients through each phase of small business development from 
start-up through expansion. A WBC in California provided a 3-year long 
"virtual business incubator" program that targeted first generation 
immigrant entrepreneurs, helping them to develop their businesses and 
to set long-term asset-building goals. While in the virtual incubator 
program, WBC clients, through coaching and training over a 3-year 
period, produced a business plan, established a business accounting 
system and legal structure, and developed a marketing plan to start and 
establish their businesses. A WBC in Massachusetts also offered a 13- 
week and 20-week multiphase training and counseling program for its 
clients that was designed to help new small businesses through each 
phase of the business development process. 

Coordination among WBCs, SBDCs, and SCORE in Some Locations Was 
Extensive, but SBA Provides Limited Guidance to Support These Efforts: 

While SBA requires WBCs to coordinate with SBDCs and SCORE chapters, 
SBA provides limited guidance or information on how these business 
assistance programs should coordinate. Increasingly, the government 
relies on new networks and partnerships to achieve critical results and 
develop public policy, often including multiple federal agencies, 
domestic and international non-or quasi-government organizations, for- 
profit and nonprofit contractors, and state and local governments. 
Notwithstanding the increased linkages in our system, each level of 
government often makes decisions on these interrelated programs 
independently, with little interaction or intergovernmental 
dialogue.[Footnote 23] According to the Grant Accountability Project, a 
working group chaired by the U.S. Comptroller General, coordination 
between federally supported programs that provide similar services, 
such as the WBC, SBDC, and SCORE programs, is important to avoid 
service duplication and to efficiently leverage federal funds.[Footnote 
24] 

Through the WBC notice of award, SBA policy requires that WBCs work 
collaboratively with SBDCs and SCORE chapters, with assistance from SBA 
district offices, to coordinate efforts in order to expand services and 
avoid duplication. When WBCs are located in communities with these 
resource partners, the WBCs are to coordinate with them in offering 
training and other forms of assistance to their clients. SBA 
headquarters officials also confirmed that they expected district 
offices to ensure that duplication between the programs did not occur. 

Though SBA policy requires WBCs to coordinate, SBA does not provide 
detailed guidance to WBCs on how coordination should occur in order to 
efficiently leverage SBA funding. Through our review, we found that the 
only guidance SBA provided to WBCs was in the notice of award, which 
asks WBCs to coordinate with SBA resource partners and other WBCs, 
where appropriate, under cosponsorship arrangements or memorandums of 
understanding. However, neither the notice of award nor any other 
document prescribes any specific practices or methods for these 
efforts. When we asked SBA officials about the lack of guidance, they 
said that they expect WBCs to initiate coordination on their own 
without specific guidance from SBA. SBA officials also said that they 
had not issued specific guidance because they did not want to be overly 
prescriptive or dictate how coordination should occur, given that local 
conditions varied and that some forms of coordination might be 
effective in some locations but not in others. 

Without specific SBA guidance, some WBCs used a variety of approaches 
to initiate coordination with other business assistance providers. Most 
WBCs said that they referred clients to SBDCs and SCORE chapters in 
their areas when appropriate and coordinated services with these other 
business assistance providers to leverage resources and avoid 
duplication. Some WBCs provided services to both start-up and 
experienced clients, but others referred more experienced or 
established small businesses to SBDCs. Some WBCs tended to refer 
clients seeking short-term counseling or specific industry expertise to 
SCORE. As an organization primarily staffed by volunteer small business 
counselors instead of full-time employees, SCORE services tended to be 
short-term and focused. For example, a small business client seeking 
restaurant industry expertise may be referred to a SCORE counselor that 
formerly owned his own restaurant. 

In several locations, WBCs were colocated or shared space with SBDCs 
and SCORE chapters and were often able to benefit from reduced overhead 
costs that came from shared facilities. Five colocated WBCs and SBDCs 
we contacted shared administrative support and leveraged counseling 
staff in order to better serve clients. For example, in California, a 
WBC that was colocated with an SBDC often referred clients to SBDC 
counselors if WBC counselors were not available in order to maximize 
resources and provide better service. 

Seven WBCs told us that the district office sometimes facilitated 
coordination between WBC, SBDC, and SCORE. Two SBA district offices 
that we contacted coordinated resource partner meetings at which 
representatives from the WBC, SBDC, and SCORE programs and other small 
business assistance providers met to discuss service coordination and 
to organize small business events. A few SBA district offices were 
involved in promoting WBC, SBDC, and SCORE activities but were not 
often directly involved in facilitating communication among the 
programs. 

Some WBCs told us that coordination was sometimes independently 
initiated by WBC, SBDC, and SCORE representatives without assistance 
from the SBA district office. For example, under a memorandum of 
understanding, WBC, SBDC, and SCORE representatives in South Carolina 
organized informal groups with other area small business assistance 
providers to plan events, coordinate services, or facilitate training. 
In Wisconsin, a WBC coordinated with SBDC, SCORE, and other small 
business assistance providers to develop a detailed triage system for 
small business clients in their area. In order to better coordinate 
services, the WBC and its resource partners developed a flow chart to 
help service providers divide their resources and determine where to 
refer clients. Under this system, clients with existing businesses were 
referred to the SBDC, and clients not yet in business were generally 
referred to the WBC. Figure 3 illustrates some of the approaches that 
WBCs took to coordinate with SBDC and SCORE. 

Figure 3: WBC Coordination Efforts: 

This figure is a chart discussing WBC coordination efforts. Women's 
Business Centers and SBDC and SCORE: 

* colocate or share facilities and staff,

* refer clients, 

* coorganize training seminars, 

* cohost community events and conferences. 

[See PDF for image] 

Source: GAO. 

[End of figure] 

Though several WBCs provided examples of successful coordination 
efforts, a few WBCs that we contacted were unable to provide sufficient 
information to demonstrate that they were coordinating with SBDC and 
SCORE in order to decrease duplication of services. In two instances, 
WBCs that we spoke with had made efforts to decrease service 
duplication without coordinating with SBDCs and SCORE chapters in their 
area. For example, one WBC had limited contact with SBDC and SCORE 
chapters and attempted to eliminate duplication in services by 
reviewing some of the course and service information on SBDC and SCORE 
chapter Web sites. 

Also, WBCs raised concerns about how to effectively coordinate by 
colocating with an SBDC or SCORE chapter. Several WBCs told us that 
they had considered coordinating with SBDC and SCORE by colocating or 
sharing space in order to reduce costs and leverage staff, but feared 
that doing so would inhibit their ability to maintain their identity 
and reach their target client group of low-income women. Until recent 
policy changes, WBCs and SBDCs were both measured on the number of 
clients that participate in small business training and counseling 
services, and one WBC told us that colocation would cause WBCs to 
compete for clients. SBA officials told us that the potential for 
competition between WBCs and SBDCs should have been reduced since SBDCs 
were no longer required to set a goal for the number of clients they 
serve. Until recently, if a WBC and an SBDC sponsored a joint training 
event, only one organization could count an individual client and the 
total number of training hours. WBCs and SCORE still have similar 
measures, and some measures could hinder collaborative efforts. 

Some WBCs experienced challenges in their attempts to coordinate 
services with SBDC and SCORE. Some WBCs told us that coordinating 
services could be difficult. In some instances, SBA encouraged WBCs to 
provide services similar to those that SBDCs were already providing to 
small businesses. For example, in the WBC notice of award, SBA 
emphasizes that WBCs provide ongoing assistance to existing or 
established small businesses. However, several WBCs told us that they 
considered SBDCs and other service providers to be better equipped to 
serve existing and experienced small businesses. In another example, 
SBA's WBC notice of award asks that each WBC make an effort to increase 
its focus on providing procurement assistance to small businesses; 
however this initiative could be interpreted as overlapping with the 
existing goals of Procurement Technical Assistance Centers, a program 
funded by the Department of Defense that provides procurement 
assistance to small business owners through SBDCs and other 
institutions. One WBC told us that the district office had encouraged 
the center to develop a government procurement curriculum, although the 
WBC was already referring clients to an SBDC in the area that provided 
this service to small business clients. 

As we have seen, some WBCs were effectively coordinating with SBDCs and 
SCORE, but others faced challenges that SBA's limited guidance has not 
addressed. The examples of successful and effective coordination that 
were shared with us demonstrate that a variety of approaches exists, 
and that some WBCs have overcome some of the challenges expressed by 
others. This type of information would be useful guidance to all WBCs. 
Without it, WBCs, SBDCs, and SCORE may be duplicating efforts and 
missing opportunities to use federal funds more efficiently. 

Conclusions: 

The WBC program has undergone significant change since its inception in 
1989. WBCs were initially envisioned as entities that would receive 
federal funding for only 5 years. However, concerns about whether the 
federal investment was sufficient to create sustainable WBCs led 
Congress to create a pilot program to provide sustainability awards for 
an additional 5 years. The creation of the sustainability awards, which 
were meant to provide some additional support to WBCs, also created 
some uncertainty about the amount of funding older WBCs would obtain 
year to year and whether sustainability awards would continue in the 
future. This year, Congress created a more permanent funding stream for 
WBCs that continue to meet the program's requirements by establishing 3-
year renewable awards. This change should address the concerns raised 
by existing WBCs. However, the program will remain competitive, and it 
is unclear how the new awards will impact SBA's ability to fund new 
centers in the future. SBA is planning to begin providing the new 3- 
year renewable awards in 2008. 

SBA's downsizing and the subsequent impact on staffing in district 
offices, as well as the growth in the WBC program in terms of number of 
WBCs participating, have had an impact on how SBA oversees WBCs. The 
significant reliance on DOTRs in SBA's district offices is particularly 
problematic because we found instances in which some DOTRs may not be 
able to carry out those responsibilities effectively. Some DOTRs had 
other district office responsibilities that could limit their ability 
to oversee WBCs, and others lacked the necessary skills and expertise. 
Because SBA relies on DOTRs, it is important that the agency ensure 
that such staff have the right mix of responsibilities and adequate 
guidance and training to carry out those responsibilities. Otherwise, 
DOTRs may not succeed in ensuring that WBCs are meeting all program 
requirements and that federal funds are not being misused or wasted. 

Communication between SBA and WBCs could also be improved. 
Communication is a key internal control that ensures SBA's policies and 
procedures are understood. The fact that several WBCs said that they 
did not obtain sufficient information on what it takes to be a 
successful WBC, even though OWBO has monthly conference calls with 
them, suggests the need to explore additional methods for providing 
information that will help WBCs to be successful. Improved 
communication would reduce the confusion expressed by many WBCs and 
increase the likelihood that the centers meet program requirements and 
perform well. 

SBA can facilitate efficient and effective use of its resources by 
encouraging coordination among the WBC, SBDC and SCORE programs when 
coordination makes sense for the geographic areas they are serving. 
Though we found that the WBC program distinguishes itself from other 
business assistance programs by providing services to economically and 
socially disadvantaged populations, all of SBA's business assistance 
providers--WBCs, SBDCs, and SCORE--provide training and counseling 
services to potential or existing entrepreneurs. As a result, the 
opportunity for duplication exists. SBA is aware that duplication could 
occur and has taken steps to encourage coordination but there is no 
explicit guidance on how to successfully coordinate services. WBCs are 
expected to demonstrate that they are coordinating with SBDCs and 
SCORE, and several of the WBCs gave us examples of how they 
coordinated, but the degree of coordination varied. Some WBCs had 
concerns about how they should coordinate while also ensuring that they 
meet their own program requirements. The instances of active 
coordination among SBA's programs and other local business assistance 
programs provide a range of methods other geographic areas could also 
consider using. These examples demonstrated how coordination can 
leverage resources and help programs minimize or avoid duplication, but 
they are not necessarily familiar to all WBCs because SBA has not 
provided guidance based on these promising practices and examples of 
effective coordination. 

Recommendations for Executive Action: 

To ensure that oversight of the WBC program is efficient and effective 
we recommend that the Administrator take the following two actions: 

* evaluate and modify, as appropriate, the responsibilities assigned to 
DOTRs to ensure that DOTRs can conduct appropriate and effective 
monitoring of the centers, and: 

* establish a communication strategy to ensure that WBCs have access to 
up-to-date information on program requirements and help the centers 
better understand how they are performing. 

To improve coordination and facilitate the efficient use of federally 
funded resources, we recommend that the Administrator direct the 
Associate Administrator of the Office of Entrepreneurial Development 
(OED) to take the following action: 

* develop guidance or information for SBA's district offices and WBCs, 
SBDCs, and SCORE that will facilitate successful coordination of 
services. This guidance or information could be developed by 
identifying promising practices currently in place in some geographic 
areas or by developing case studies or examples of successful 
coordination models. The guidance should also assist district offices, 
WBCs, SBDCs and SCORE in providing sound advice on how to coordinate 
services when doing so could conflict with meeting individual program 
requirements or initiatives. 

Agency Comments: 

We provided SBA with a draft of this report for review and comment. SBA 
provided no comments on the draft report or its recommendations. 

We will send copies of this report to the chair of the Committee on 
Small Business, House of Representatives, the Administrator of the 
Small Business Administration, and other interested parties. We will 
also make copies available to others upon request. In addition, the 
report will be available at no charge on GAO's Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-8678. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. Staff acknowledgments are listed in appendix III. 

Signed by: 

William B. Shear: 

Director, Financial Markets and Community Investment: 

[End of section] 

Appendix I: Scope and Methodology: 

In this report, we address (1) the uncertainties associated with the 
funding process for Women's Business Centers (WBC); (2) the Small 
Business Administration's (SBA) oversight of the WBC program, including 
policies and procedures for monitoring compliance with program 
requirements and assessing program effectiveness; and (3) the services 
that WBCs provide to small businesses and actions that SBA and WBCs 
have taken to avoid duplicating the services offered by the Small 
Business Development Center (SBDC) and SCORE (formerly Service Corps of 
Retired Executives) programs. 

To address all three objectives, we reviewed the legislative history of 
the WBC program, our previous reports, SBA's policies and procedures 
for administering the program, and studies of the program conducted by 
SBA, SBA's Office of Inspector General, and external organizations. We 
conducted site visits in 6 states and the District of Columbia and 
interviewed officials from 10 WBCs, 7 SBDCs, and 6 SBA district 
offices. We selected these locations to represent geographic diversity 
and to enable us to rely on staff from our field offices. We also 
conducted 17 telephone interviews with WBCs randomly selected from the 
universe of 99 WBCs that received SBA awards in fiscal year 2007, using 
criteria to ensure that we obtained a mix of newer and more established 
WBCs that would allow us to compare a range of experiences with the 
program. Table 3 lists the WBCs and SBDCs we contacted. We interviewed 
officials from SBA's Office of Entrepreneurial Development (OED) and 
Office of Women's Business Ownership (OWBO) who are responsible for 
overseeing the program. 

Table 3: Locations of Site Visits and Telephone Interviews with WBCs 
and SBDCs: 

WBC site visits: Berkeley, Calif; 
WBC telephone interviews: Tucson, Ariz; 
SBDC site visits: San Francisco, Calif; 
SBDC telephone interview: Atlanta, Ga. 

WBC site visits: San Francisco, Calif; 
WBC telephone interviews: Los Angeles, Calif. (2); 
SBDC site visits: Washington, D.C; 
SBDC telephone interview: [Empty]. 

WBC site visits: Washington, D.C; 
WBC telephone interviews: Stamford, Conn; 
SBDC site visits: Chicago, Ill; 
SBDC telephone interview: [Empty]. 

WBC site visits: Atlanta, Ga; 
WBC telephone interviews: Wilmington, Del; 
SBDC site visits: Chestnut Hill, Mass; 
SBDC telephone interview: [Empty]. 

WBC site visits: Kennesaw, Ga; 
WBC telephone interviews: Orlando, Fla; 
SBDC site visits: College Park, Md; 
SBDC telephone interview: [Empty]. 

WBC site visits: Chicago, Ill; 
WBC telephone interviews: Des Moines, Iowa; 
SBDC site visits: Springfield, Va; 
SBDC telephone interview: [Empty]. 

WBC site visits: Rockford, Ill; 
WBC telephone interviews: Lenexa, Kan; 
SBDC site visits: [Empty]; 
SBDC telephone interview: [Empty]. 

WBC site visits: Baltimore, Md; 
WBC telephone interviews: New Orleans, La; SBDC site visits: [Empty]; 
SBDC site visits: [Empty]; 
SBDC telephone interview: [Empty]. 

WBC site visits: Worcester, Mass; 
WBC telephone interviews: Fayetteville, N.C; 
SBDC site visits: [Empty]; 
SBDC telephone interview: [Empty]. 

WBC site visits: Springfield, Va; 
WBC telephone interviews: Buffalo, N.Y; 
SBDC site visits: [Empty]; 
SBDC telephone interview: [Empty]. 

WBC site visits: [Empty]; 
WBC telephone interviews: San Juan, P.R; 
SBDC site visits: [Empty]; 
SBDC telephone interview: [Empty]. 

WBC site visits: [Empty]; 
WBC telephone interviews: Columbia, S.C; 
SBDC site visits: [Empty]; 
SBDC telephone interview: [Empty]. 

WBC site visits: [Empty]; 
WBC telephone interviews: El Paso, Tex; 
SBDC site visits: [Empty]; 
SBDC telephone interview: [Empty]. 

WBC site visits: [Empty]; 
WBC telephone interviews: Salt Lake City, Utah; 
SBDC site visits: [Empty]; 
SBDC telephone interview: [Empty]. 

WBC site visits: [Empty]; 
WBC telephone interviews: Montpelier, Vt; 
SBDC site visits: [Empty]; 
SBDC telephone interview: [Empty]. 

WBC site visits: [Empty]; 
WBC telephone interviews: Kenosha, Wis; 
SBDC site visits: [Empty]; 
SBDC telephone interview: [Empty]. 

Source: GAO. 

[End of table] 

To address uncertainties associated with the funding process, we 
interviewed officials in SBA's Division of Procurement and Grants 
Management (DPGM) regarding the WBC award process and new legislation 
changing the WBC program's funding structure. We interviewed officials 
at the Office of Management and Budget (OMB) regarding specific 
findings related to the WBC funding process in its Program Assessment 
Rating Tool (PART). Additionally, as part of our interviews, we asked 
the 27 WBCs to provide their perspectives on the WBC funding process. 

To assess SBA's oversight of the program, we reviewed documentation 
that SBA uses to oversee WBCs and the award applications and 
programmatic and financial examination reports for 7 of the 10 WBCs 
that we visited. We interviewed SBA district office staff on their role 
in overseeing the WBCs and on the guidance that SBA provides to them. 
We also interviewed officials in DPGM regarding DPGM's role in WBC 
funding and oversight. We asked the 27 WBCs about their relationship 
with SBA. 

To identify the services WBCs provide and actions WBCs and SBA take to 
avoid duplication with other SBA programs, we reviewed and compared the 
statutory authority for the WBC, SBDC, and SCORE programs. 
Additionally, we reviewed two reports from SBA's contracted study and 
studies by three external entities on the impact of WBCs. We describe 
each study and provide an assessment of each study's design in appendix 
II. We asked the 27 WBCs, 7 SBDCs, and SCORE's national office about 
the services they provide and coordination among the programs. 
Additionally, we reviewed the Web sites of 24 of the WBCs and 6 of the 
SBDCs that we contacted, and SCORE to identify the services that they 
offer and determine whether the Web sites provided any information on 
how the three programs coordinate in their geographic areas (local 
markets). 

We conducted our work in California, Georgia, Illinois, Maryland, 
Massachusetts, Virginia, and Washington, D.C. between August 2006 and 
November 2007 in accordance with generally accepted government auditing 
standards. 

[End of section] 

Appendix II: Studies Evaluating the Impact of WBCs: 

We reviewed four studies that have evaluated various aspects of the 
impact of WBCs. One study was sponsored by SBA. SBA contracted with 
Concentrance Consulting Group--a management consulting firm offering 
services to government and private sector clients--to conduct a 
longitudinal impact study of its business assistance programs, 
including the WBC program. We reviewed the first two reports of the SBA 
study and only reviewed the sections addressing the WBC program. The 
three other studies focused on the impact of WBCs and were sponsored by 
private organizations. The Association of Women's Business Centers 
(AWBC)--a nonprofit organization representing WBCs--sponsored the study 
conducted by the Center for Women's Leadership at Babson College. The 
National Women's Business Council (NWBC)--a federal advisory council 
created by Congress--sponsored a study conducted by Quality Research 
Associates, a research firm. The fourth study was conducted by the 
Center for Women's Business Research--a nonprofit research 
organization--and was sponsored by NWBC, AT&T, and American Express. We 
identified these three studies through Internet literature searches 
during July and August 2006 as being industry-conducted studies using 
the following search terms: "Women's Business Centers" AND "Study" OR 
"Studies"; "WBC" AND "Study" OR "Studies." Each study was reviewed by 
two staff members. Using a template, the first reviewer took notes on 
author's affiliation, objectives, methodology, limitations, and other 
information. The second reviewer then reviewed these notes after 
reading the study. Where there was lack of agreement, the two reviewers 
discussed their points of view and reached agreement. 

Based on our assessment of the studies' design and methodology, we 
determined that the studies provide useful information on how some WBCs 
have impacted their clients, but these studies are limited because of 
low survey response rates and other study limitations. It is important 
to note that there are a number of considerations in attempting to 
evaluate the impact of service delivery programs like the WBC program. 
Voluntary surveys of private citizens tend to yield much lower response 
rates than surveys of organizations or nonvoluntary surveys, like the 
Census. Response rate is a key statistic toward understanding whether 
study results are representative of the population that has been 
sampled. As a consequence, any study of WBC clients may be limited in 
describing the universe of clients due to low response rates. The type 
of error associated with low response rates is called survey 
nonresponse error. There are some procedures that help mitigate against 
survey nonresponse error, and in our review of the study conducted for 
SBA and the other studies, we have noted when the study used these 
procedures. Also, when studies are based on small numbers, such as the 
studies using WBCs as the unit of analysis, it can be difficult to 
detect patterns in the data. 

Overall, we believe that any inferences from these studies are largely 
limited to the centers and clients actually providing data for the 
studies, except perhaps in the first report for the SBA study, which 
included procedures to increase the confidence that the results are 
more representative of the population of clients served. In general, we 
found that all four of the studies appear to have reasonable and well 
thought through research designs. However, in some studies key 
information was not reported that would have enabled us to more 
completely evaluate them. Table 4 provides information on each of the 
studies and our assessment of the studies' design. 

Table 4: Assessment of Four Studies of WBCs: 

Title: Impact Study of Entrepreneurial Development Resources (2004 and 
2006); 
Author/Sponsor: Concentrance Consulting Group for SBA; 
Purpose and description of study: SBA designed a multiyear study to 
assess the impact of its business assistance programs, one of which is 
the WBC program. SBA hired Concentrance to administer the study, 
analyze the findings, and write the reports. The 2004 report reflected 
findings on the impact of the WBC program on clients served during 
2003. The 2006 report presents findings for clients served during 2004 
as well as findings of a follow-up survey of 2003 respondents. Among 
other things, the study measures the clients' perceptions of usefulness 
of information in starting a business, change management practices, and 
business growth for firms that used SBA's business assistance programs; 
Assessment of study design: The study used a stratified random sample 
to select clients from an SBA database, which is one means to overcome 
possible selection bias. The 2004 study had a 45.8 percent response 
rate combined for its mail and telephone surveys from WBCs. A 
nonresponse analysis found no difference between respondents and 
nonrespondents on number of full-time equivalents or average sales 
revenues. This analysis provides more confidence that the results of 
this study are likely to be representative of a larger number of 
clients than only those who responded and may be representative of the 
WBC client population across most centers. The 2006 study had a lower 
response rate of 23 percent for WBC clients and should be interpreted 
with caution. 

Title: The Impact and Influence of Women's Business Centers in the 
United States (2005); 
Author/Sponsor: Mary Godwyn, Nan Langowitz, and Norean Sharpe for the 
Center for Women's Leadership at Babson College for the Association of 
Women's Business Centers; 
Purpose and description of study: The study surveyed WBCs in 2004 to 
examine the social and economic impact of WBCs and their effectiveness 
in assisting women entrepreneurs. The study reports on characteristics 
of the WBCs, such as age, geographic location, organizational 
structure, and funding. The study analyzed information WBCs collect on 
their clients, including education and household income levels. The 
study also identified the types of services and practices WBCs use to 
assist clients and challenges WBCs face, such as funding and their 
relationship with SBA; 
Assessment of study design: Data collection methods included a survey 
of 52 prequalified WBCs and focus groups of center directors attending 
a national conference. The survey had a response rate of 52 percent. A 
nonresponse bias analysis was not performed, and some of the analysis 
of impact and effectiveness was also based on focus groups of center 
directors attending the national conference, which may have a selection 
bias. Therefore, the findings may not be representative of all center 
directors. The report did not include the questions used in the survey 
or the focus groups, which limited our ability to fully assess the 
study. 

Title: Analyzing the Economic Impact of the Women's Business Center 
Program (2004); 
Author/Sponsor: Quality Research Associates for the National Women's 
Business Council; 
Purpose and description of study: The study primarily uses data that 
SBA collects from WBCs to analyze the economic impact of the WBC 
program and to understand the factors contributing to positive 
outcomes. The analyses included demographic data and output and outcome 
measures based on data that WBCs collect from their clients, including 
the number of clients served, gross receipts, profits, and new jobs 
created. The analyses also looked at external factors that could affect 
WBC clients, such as city/town size and poverty rate; 
Assessment of study design: The primary data source was the 2001, 2002, 
and 2003 data SBA collects from WBCs for its performance measures on 
the WBC program. Additional data came from WBC Web sites and Census 
data. The report did not reflect how the data from SBA was initially 
obtained and data reliability was limited to the handling of missing 
data. The lack of information on the reliability of the data that was 
used limited our ability to fully assess the study. 

Title: Launching Women-Owned Businesses: A Longitudinal study of 
Women's Business Center Clients (2004); 
Author/Sponsor: Center for Women's Business Research; 
Purpose and description of study: The goals of the 3-year study were to 
examine the progress of clients from four WBCs over time and to assess 
the factors associated with the successful launch and growth of women-
owned businesses. Specifically, the report discussed findings on these 
WBCs and on personal and economic situations; 
Assessment of study design: The study focused on four centers and 
applied a longitudinal mail survey of clients served by the four 
centers. The survey was administered four times between 2001 and 2003. 
Because the study focused on four centers, all of which were in major 
cities, the results cannot be generalized to the population of women's 
business centers. A response bias analysis showed that a higher 
percentage of middle income clients and business owners responded to 
follow-up surveys. The response rate on the fourth and final survey was 
low (19 percent), and less than half of those respondents provided 
information on all data points reflected in the report. The report did 
not include the questions used in the survey, which limited our ability 
to fully assess the study. 

Source: GAO. 

[End of table] 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

William B. Shear (202) 512-8678 or [email protected]: 

Staff Acknowledgments: 

The following individuals made key contributions to this report: Kay 
Kuhlman, Assistant Director; Heather Atkins; Bernice Benta; Carolyn 
Boyce; Michelle Bracy; Tania Calhoun; Emily Chalmers; and Rudy Chatlos. 

[End of section] 

Footnotes: 

[1] The Women's Business Ownership Act of 1988, Pub. L. No. 100-533, ï¿½ 
201, 102 Stat. 2689, 2690 (1988) created the WBC program with 
demonstration projects that would expire in 1991. Although the act was 
passed in 1988, WBCs were initially funded in 1989. 

[2] Under the Federal Grant and Cooperative Agreement Act of 1977, a 
grant and cooperative agreement are closely related assistance 
arrangements with essentially the same basic purpose: to encourage the 
recipients of funding to carry out activities in furtherance of a 
public goal. The difference is the degree of involvement between the 
federal agency and the recipient in the performance of the funded 
activity. When the involvement is expected to be "substantial", the act 
requires the use of a cooperative agreement. GAO, Principles of Federal 
Appropriations Law, Third Ed., Vol. II, GAO-06-382SP (Washington, D.C.: 
February 2006). 

[3] The Women's Business Development Act of 1991, Pub. L. No. 102-191, 
ï¿½ 2, 105 Stat. 1589 (1991), made WBCs 3-year projects. In the Small 
Business Reauthorization Act of 1997, Pub. L. No. 105-135, ï¿½ 308, 111 
Stat. 2592, 2611 (1997), the projects were extended to 5 years. The 
Women's Business Centers Sustainability Act of 1999, Pub. L. No. 106- 
165, ï¿½ 4, 113 Stat. 1795, 1796 (1999), created 5-year sustainability 
pilot projects awarded to WBCs who had completed the first 5-year 
project. 

[4] The U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and 
Iraq Accountability Appropriations Act, 2007, Pub. L. No. 110-28, ï¿½ 
8305, 121 Stat. 112, 209 (2007), amends the Small Business Act to 
repeal the sustainability pilot program and to permit WBCs to receive 
SBA funding on a continual basis. WBCs currently in the program and 
those that have successfully graduated will be eligible to apply for 
continuous award funding through 3-year renewable awards of up to 
$150,000 per year. 

[5] GAO, 21st Century Challenges: Reexamining the Base of the Federal 
Government, GAO-05-325SP (Washington, D.C.: February 2005). 

[6] OMB, Program Assessment: Women's Business Centers, [hyperlink, 
http://www.expectmore.gov] (accessed Feb. 6, 2007). 

[7] When permissible under the terms of the Community Development Block 
Grant (CDBG) program, CDBG funds may also be used to match a WBC award. 

[8] The 63 lead centers include one in every state (Texas has four and 
California six), the District of Columbia, Guam, Puerto Rico, American 
Samoa, and the U.S. Virgin Islands. 

[9] SBA's Division of Procurement and Grants Management was formerly 
the Office of Procurement and Grants Management (OPGM). 

[10] OMB, Program Assessment: Women's Business Centers, [hyperlink, 
http://www.expectmore.gov] (accessed Feb. 6, 2007). 

[11] Small Business Reauthorization Act of 1997, Pub. L. No. 105-135, 
Section ï¿½ 308(a), 111 Stat. 2592, 2611 (1997); 
see 15 U.S.C. Section ï¿½ 656(h). 

[12] Information transfers include the use of library resources, 
computers or software, viewing of business videos, fax services, 
information mailings, telephone assistance, and electronic assistance. 

[13] SBA headquarters still coordinates biannual financial audits for 
SBDCs. 

[14] SBA Office of Inspector General, Grants to the Texas Center for 
Women's Business Enterprise, Austin, Texas, Audit Report No. 3-18, 
(Washington, D.C.: March 2003). 

[15] SBA and OMB have a goal of making WBC award payments within 30 
days of the date that the WBC submits a payment request. 

[16] Mary Godwyn, Nan Langowitz, and Norean Sharpe, The Impact and 
Influence of Women's Business Centers in the United States, (Babson 
Park, Mass.: Center for Women's Leadership at Babson College, April 
2005). 

[17] GAO, Standards for Internal Control in the Federal Government, 
GAO/ AIMD-00-21.3.1 (Washington, D.C.: November 1999). 

[18] 15 U.S.C. ï¿½ 656(f) 

[19] Godwyn, Langowitz, and Sharpe, The Impact and Influence of Women's 
Business Centers. 

[20] Small Business Administration, Office of Entrepreneurial 
Development , Initial Impact Study of Entrepreneurial Development 
Resources, prepared by Concentrance Consulting Group (Washington D.C. , 
November 2004). 

[21] Godwyn, Langowitz, and Sharpe, The Impact and Influence of Women's 
Business Centers. 

[22] Small Business Administration, Initial Impact Study of 
Entrepreneurial Development Resources. 

[23] GAO, 21st Century Challenges: Reexamining the Base of the Federal 
Government, GAO-05-325SP, (Washington, D.C.: February 2005). 

[24] Guide to Opportunities for Improving Grant Accountability," 
Domestic Working Group, Grant Accountability Project, October 2005, 
available at [hyperlink, http://www.epa.gov/oig/dwg/reports/]. 

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